Lionsgate bondholders balk at Icahn

Billionaire's extension to buy debt expired Friday

Lionsgate bondholders have mostly given the cold shoulder to Carl Icahn’s offer to buy $316 million of the mini-major’s debt.

The billionaire investor, who owns 14.5% of Lionsgate stock, disclosed in a filing Monday that he obtained only $583,000 of Lionsgate bonds under his extension of an offer that expired last Friday. Icahn disclosed on April 21 that he obtained only $8.9 million of the bonds — less than 3% — before extending the offer.

Neither Lionsgate nor Icahn had any comment Tuesday.

Icahn had offered a premium for the bonds, bidding better than 15% above the recent trading levels for two series of bonds that expire in 2024 and 2025.

Icahn has said in the past that he doesn’t plan to launch a takeover battle for Lionsgate, although his move to acquire the debt raised the specter of that scenario since it would have enabled him to convert debt into more common stock. He’s been highly critical of Lionsgate’s $255 million purchase for the TV Guide Network.

For its part, Lionsgate has been in talks about selling a minority stake in TV Guide but it’s stayed silent about Icahn since its private deal on April 20 with two bondholders to refinance $66.6 million in convertible debt, effectively preventing those unidentified bondholders from tendering their bonds to Icahn.

The studio announced last week that it had reached an output deal with Ryan Kavanaugh’s Relativity Media covering up to five movies a year. That deal had been expected in the wake of Lionsgate’s decision to trim its inhouse production slate (Daily Variety, April 14).